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Otto Lee warns of federal funding cuts, lays out county plans for health, housing and wildfire protection
Summary
At the March 13, 2026 State of the County, Board President Otto Lee said federal budget changes threaten roughly $1 billion a year in county funding and outlined local actions — hospital acquisition, a new behavioral health center, Measure A housing units, AI wildfire sensors and a blue‑ribbon partnerships commission.
San José — Santa Clara County Board President Otto Lee delivered the 2026 State of the County address on March 13, saying recent federal policy changes pose a major threat to county services and outlining steps the county will take to protect health, housing and safety.
Lee said federal reductions will hit the county’s budget and health programs hard. “For this alone this county will lose about $1 billion a year,” he said, and described litigation by the county counsel seeking temporary restraining orders and injunctions to preserve federal funds. He framed the county’s legal actions as efforts to protect hospitals and safety net programs relied upon by residents.
The speech highlighted specific local investments and outcomes. Lee credited the county’s acquisition of Regional Medical Center — which the address said the county assumed ownership of on April 1, 2025 — with reopening a level‑two trauma center and restoring labor and delivery services. “We stepped in to acquire that hospital. We immediately reopened the trauma emergency room,” Lee said, and reported patient volume doubled and the facility reached financial stability ahead of original projections.
On behavioral health, Lee announced a new center at the Valley Medical Center campus that will combine outpatient services with 77 inpatient beds for adults, adolescents and children experiencing acute psychiatric needs. The county said the facility will reduce the need to send minors out of county for psychiatric care.
Housing and homelessness were central themes. Lee said the county has housed more than 20,000 people through its Community Plan to End Homelessness and remains on track to create approximately 6,700 affordable units tied to Measure A, the county’s 2016 affordable housing bond, which he described as a major local funding source.
Public safety initiatives noted in the address included continued gun buyback events and law enforcement partnerships. Lee said county buybacks have removed more than 1,500 unwanted firearms from streets and neighborhoods, including assault‑style rifles and ghost guns.
On wildfire mitigation, Lee said the board has moved to study and deploy AI‑enabled fire sensors in high‑risk parks and wildland‑urban interface areas; 15 of an expected 50 sensors were installed at the time of the speech. He urged continued investments in adaptation planning and urban forestry.
Lee closed by announcing a presidential blue‑ribbon commission on public‑private partnerships to expand corporate and nonprofit collaboration with county programs, calling on Silicon Valley businesses to contribute expertise, volunteers or funding.
The address mixed policy detail with appeals to community and volunteerism. Lee repeatedly framed local actions as the county’s response to federal uncertainty and emphasized keeping services close to home. The event included a video and a round of applause for county staff; there were no votes or formal board actions taken during the ceremony.
Next steps: Lee noted the board faces a budget shortfall that it must address before the June budget deadline and highlighted ongoing litigation and implementation tasks tied to protecting federal funding and delivering the projects described in his speech.
